An annual audit report on city finances found the city presented fair and accurate financial statements for the 2006-07 fiscal year.

The report, prepared by auditor Charles Turney, does more than just verify city revenue and expenditure reports are accurate, though. It also allows the city to assess its “health” in terms of finances.

The city claims $107.1 million in total net assets, a decrease from $108.7 million in 2005-06 which can be contributed to depreciation of those assets.

City Manager Clyde Shaw noted that even though the city does not pay taxes, it still has to show which assets have declined in value.

“Depreciation is really a strange thing,” Shaw said.

“It would be nice if we could fully fund depreciation every year, but we haven’t been able to do that.”

The most important value of depreciation assessment comes when seeking financing for various projects.

“It’s more critical when you’re going out for financing,” Shaw said, noting financiers look at the assets and values in a community when considering loans.

And while depreciation is part of the financial picture, it is only one portion.

The city has seen an increase of 1.4 percent in sales and use tax revenue from the 2005-06 fiscal year. The increase is more than what was projected for the year.

Several major financial commitments to improve infrastructure were entered into including a $10 million project to renovate the water treatment facility and a $10 million project to amend the condition of city streets.

Though revenues are stable, the report shows a total of $37 million in outstanding notes and capital leases. The projects contributing to that debt are backed by dedicated revenues, including sales tax percentages and fees.

Overall, the city received a clean bill on the audit report, showing accountability in use of dollars.

Duncan Mayor Gene Brown said while the report indicates how the city is performing, it also allows taxpayers to see how their money is being spent.

“It’s a good feeling to get an audit report like this,” Brown said.

Continuing the trend with audit reports, the auditor found no reportable problems in the financial statements.

A copy of the report will be available at City Hall and Duncan Public Library for public examination.

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